The 1893 US financial crisis that caused widespread bank failures, railroad bankruptcies, and a severe stock-market collapse was the Panic of 1893.
The panic developed after the collapse of the Philadelphia and Reading Railroad and the failure of other heavily indebted rail companies. Investors became increasingly worried about the reserves of gold held by the United States, especially after the Sherman Silver Purchase Act increased government purchases of silver. Confidence weakened, depositors withdrew funds, and many banks suspended payments or failed.
The resulting depression was one of the worst economic downturns the United States had experienced up to that time. Unemployment rose sharply, businesses closed, and railroad construction contracted. The crisis also intensified political conflict over whether the country should maintain a gold standard or expand the monetary role of silver.
The Panic of 1893 is distinct from the Panic of 1873 and the Panic of 1907. Its causes combined railroad overbuilding, fragile credit, bank runs, and a currency dispute. The downturn continued for several years, although recovery began before the end of the decade.